Hey there, fellow investors! It's been a minute since my last update, but I couldn't resist sharing some insights on how my portfolio has been performing lately and what's on the horizon. So, let's dive in!
Portfolio Performance Check-In:
Straight to the point – my investments have been chugging along nicely, keeping pace with big shots like the S&P and Nasdaq. We're looking at a solid 10.1% return year-to-date. Not bad, right? Sure, it's a tad shy of the S&P's 10.7% and Nasdaq's 9.41%, but hey, it's all about the journey, isn't it?
Winners and Losers:
Now, let's talk winners and losers. On the bright side, shoutout to $Micron Technology(MU)$ $Meta Platforms, Inc.(META)$ $Taiwan Semiconductor Manufacturing(TSM)$ for carrying the torch. But, alas, we've also had our share of setbacks with $Vale SA(VALE)$ $Lululemon Athletica(LULU)$ $MBUU. That's the name of the game when you're handpicking stocks, though – sometimes you win big, and sometimes you learn big.
Semiconductor Stocks
Amidst the intricate landscape of semiconductor stocks, my foresight into a potential rally in 2024 has indeed materialized. The favorable supply-demand dynamics, coupled with an uptick in business sentiment catalyzed by anticipated lower interest rates, have paved the way for a resurgence in semiconductor manufacturing and subsequent price recovery.
Global semiconductor sales witnessed a substantial uptick of 15.2%, marking the most significant surge since May 2022. Projections from the Semiconductor Industry Association (SIA) paint a bullish outlook, with double-digit growth anticipated for 2024 compared to the preceding year. Noteworthy catalysts including the surge in Gen AI enthusiasm, electronics market rebound, and advancements in AR/VR applications, collectively bolster this optimistic trajectory.
TSMC
Within this landscape, Taiwan Semiconductor Manufacturing (TSMC) emerges as a formidable player, poised to capitalize on the burgeoning demand for semiconductor chips. Securing substantial orders from tech titans such as Apple, Intel, and AMD for its cutting-edge 3nm chips underscores TSMC's strategic positioning.
Anticipating a robust revenue uptick ranging between 24% to 26% year-on-year, TSMC's growth trajectory remains robust. Despite the recent rally, I maintain my position in TSMC, underpinned by confidence in its sustained execution of growth strategies and the resilience of its economic moat.
Micron
Another company that has benefited from the rebound in semiconductor demand is Micron. As the third-largest manufacturer of memory chips alongside industry giants Samsung and SK Hynix, Micron's position in the market is formidable. With the burgeoning demand for memory capacity driven by advancements in artificial intelligence (AI), Micron has experienced increased interest from customers seeking to acquire its products.
A recent announcement by Nvidia further solidifies Micron's position in the market. Nvidia revealed that its GeForce RTX 40-Series GPUs would utilize Micron’s second-generation 16Gb GDDR6x memory chips, signifying a promising partnership for Micron's future prospects. Additionally, Micron’s Handgap memory chips, particularly the HBM3E, have commenced mass production to cater to the demand for Nvidia’s H200 GPU in 2024. These developments underscore Micron’s robust product roadmap, poised to capitalize on the rising demand for AI-related technologies.
However, it's important to acknowledge the risks associated with Micron, including the high bargaining power of key customers like Nvidia and the potential for customers to switch to competitors' products. Monitoring these threats will be crucial in safeguarding the company's growth trajectory.
Furthermore, other winners in my portfolio such as META, AMD, and Fortinet continue to thrive within the AI and cybersecurity sectors. Their sustained growth reinforces my confidence in their ability to deliver strong financial results in the foreseeable future.
Portfolio Management
Beyond discussing individual stock performance, I'd like to share some insights on portfolio management. Firstly, I reiterate the importance of maintaining a long-term investment horizon. Despite potential market overvaluations, attempting to time the market can be counterproductive and may result in missed opportunities for wealth accumulation.
Reflecting on my portfolio, while there were both winners and losers, the gains from successful investments far outweighed any losses. This has contributed to a significant overall gain in portfolio performance. In the first quarter alone, my portfolio generated a return of 10.1%, matching the average annual return of the S&P. In comparison to bonds, my portfolio's performance exceeds twice the annual 5-year US Treasury Yield. In other words, had I decided to invest in Treasury Bonds, which many investors have done in the past year, it would have taken me two years to achieve the portfolio gains that I experienced within the last quarter. This underscores the potential of equities to provide substantial capital returns, a crucial aspect in the compounding of wealth. Thus, my bullish outlook on equities persists, driven by their potential to accelerate wealth accumulation.
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